Iraq's largest dam is on the brink of collapse - and if it does so it could unleash a tidal wave 65ft high over Mosul, a city of 1.7 million, the US has warned.

The US warned Iraq in May that reconstruction of the dam had to be a "national priority" - if not, the results could be catastrophic.

However, a US watchdog said reconstruction of the 23-year-old dam had been plagued by mismanagement and potential fraud.

In a report published today, the Special Inspector General for Iraq Reconstruction (SIGIR) said US-funded "short-term solutions" had yet to significantly solve the dam's problems.

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SIGIR found multiple failures in several of the 21 contracts awarded to repair the dam. Among the faults were faulty construction and delivery of improper parts, as well as projects which were not completed despite full payments having been made.

The top US military commander in Iraq, General David Petraeus, and US ambassador Ryan Crocker wrote to Iraqi Prime Minister Nouri al Maliki in May urging him to make fixing the dam a "national priority".

"A catastrophic failure of the Mosul Dam would result in flooding along the Tigris River all the way to Baghdad" the letter warned.

"Assuming a worst-case scenario, an instantaneous failure of Mosul Dam filled to its maximum operating level could result in a flood wave 20m deep at the city of Mosul, which would result in a significant loss of life and property."

If that were to happen some have predicted that as many as 500,000 people could be killed.

The dam holds back upwards of 12 billion cubic meters of water for the arid western Ninewah Province, while creating hydroelectric power for the 1.7 million residents of Mosul.